Kemin Foods v. Pigmentos Vegetales Del Centro

• Decision Date: 25 September 2006
• Docket Number: No. 06-1002.,No. 05-1479.,No. 05-1480.,05-1479.,05-1480.,06-1002.
• Citation: 464 F.3d 1339
• Parties: KEMIN FOODS, L.C., and THE CATHOLIC UNIVERSITY OF AMERICA, Plaintiffs-Cross Appellants, v. PIGMENTOS VEGETALES DEL CENTRO S.A. DE C.V., Defendant-Appellant. KEMIN FOODS, L.C., and The Catholic University of America, Plaintiffs-Appellees, v. Pigmentos Vegetales Del Centro S.A. De C.V., Defendant-Appellant. Kemin Foods, L.C., and The Catholic University of America, Plaintiffs-Cross Appellants, v. Pigmentos Vegetales Del Centro S.A. De C.V., Defendant-Appellant. Kemin Foods, L.C., and The Catholic University of America, Plaintiffs-Appellees, v. Pigmentos Vegetales Del Centro S.A. De C.V., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

464 F.3d 1339

KEMIN FOODS, L.C., and THE CATHOLIC UNIVERSITY OF AMERICA, Plaintiffs-Cross Appellants, v. PIGMENTOS VEGETALES DEL CENTRO S.A. DE C.V., Defendant-Appellant.

KEMIN FOODS, L.C., and The Catholic University of America, Plaintiffs-Appellees, v. Pigmentos Vegetales Del Centro S.A. De C.V., Defendant-Appellant.

Kemin Foods, L.C., and The Catholic University of America, Plaintiffs-Cross Appellants, v. Pigmentos Vegetales Del Centro S.A. De C.V., Defendant-Appellant.

Kemin Foods, L.C., and The Catholic University of America, Plaintiffs-Appellees, v. Pigmentos Vegetales Del Centro S.A. De C.V., Defendant-Appellant.

No. 05-1479.

No. 05-1480.

No. 06-1002.

United States Court of Appeals, Federal Circuit.

September 25, 2006.

COPYRIGHT MATERIAL OMITTED

Susan K. Knoll, Howrey LLP, of Houston, TX, argued for Kemin Foods, L.C., et al. With her on the brief were Richard L. Stanley and Scott W. Clark.

Michael A. Dee, Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, PLC, of West Des Moines, IA, argued for Pigmentos Vegetales Del Centro S.A. De C.V. With him on the brief was Camille L. Urban.

Before NEWMAN, MAYER, and BRYSON, Circuit Judges.

BRYSON, Circuit Judge.

I. Background

This litigation began when Kemin Foods, L.C., and The Catholic University of America filed a patent infringement suit against Pigmentos Vegetales del Centro S.A. de C.V. ("PIVEG"), alleging infringement of two patents. PIVEG counterclaimed, seeking a declaratory judgment that the two patents were invalid and unenforceable. PIVEG also filed counterclaims alleging unfair competition and antitrust violations. The unfair competition and antitrust counterclaims were severed from the remainder of the case, and the second case was stayed pending resolution of the patent issues.

Kemin Foods is the assignee of one of the two patents in suit, U.S. Patent No. 5,648,564 ("the '564 patent"). The Catholic University of America owns the other patent, U.S. Patent No. 5,382,714 ("the '714 patent"), and Kemin Foods is the exclusive licensee of that patent. (We refer to The Catholic University of America and Kemin Foods collectively as "Kemin.") The patents in suit include process and product claims pertaining to purified lutein that is extracted from plants. Lutein is a carotenoid (i.e., an organic, naturally occurring pigment) that Kemin and PIVEG incorporate in dietary health supplements that they manufacture and distribute.

At trial, Kemin argued that PIVEG infringed product claims 1, 2, and 4 of the '714 patent and process claim 1 of the '564 patent. Kemin also intended to pursue an allegation of infringement of process claim 5 of the '714 patent, but was effectively precluded from doing so by a pretrial order striking a supplemental expert report proffered by Kemin.

At the end of the trial, the jury found that the asserted claims were not invalid. The jury also found that the asserted claims of the '714 patent were not infringed, but that claim 1 of the '564 patent was infringed under the doctrine of equivalents. The jury awarded Kemin $58,775 in damages. The district court denied the parties' respective motions for judgment as a matter of law, upheld the jury's verdicts on validity and infringement, and enjoined PIVEG from infringing the '564 patent. The court also rejected PIVEG's claim that both patents were unenforceable because of inequitable conduct. With respect to the '564 patent, the court concluded that Kemin did not withhold any material reference or intend to deceive the Patent and Trademark Office ("PTO"). With respect to the '714 patent, the court concluded that the showings of materiality and deceptive intent with respect to a reference withheld during prosecution were not sufficient to render the patent unenforceable. Finally, the district court determined that Kemin was the prevailing party in the patent portion of this suit, and it granted Kemin's request for an award of costs.

In appeal No. 05-1479, PIVEG challenges the portions of the court's judgment holding the '714 patent nonobvious, holding both patents enforceable, and awarding costs to Kemin. On those issues, we affirm. In its cross-appeal, No. 05-1480, Kemin challenges the court's judgment that the asserted claims of the '714 patent were not infringed. We affirm that ruling. Kemin also challenges the court's pretrial order striking Kemin's supplemental expert report. On that issue, we vacate and remand for the district court to consider the supplemental expert report and Kemin's claim of infringement of claim 5 of the '714 patent. Finally, Kemin asks that we modify the permanent injunction issued by the district court. We decline to do so and thus affirm the court's injunctive order.

Also before the court is PIVEG's separate appeal, No. 06-1002, from a decision in the severed portion of the litigation in which the court dismissed PIVEG's unfair competition and antitrust counterclaims and denied PIVEG leave to amend and supplement those counterclaims. On that appeal, we affirm.

II. PIVEG's Appeal in the Patent Case

A. Obviousness of Claim 1 of the '714 Patent

PIVEG argues that a prior art reference, a 1991 article in the journal Poultry Science, teaches all the limitations of claim 1 of the '714 patent except for the limitation requiring that the claimed purified lutein product contain no traces of toxic chemicals. With respect to that limitation, PIVEG argues that a person of ordinary skill in the art in the early 1990s would have known how to remove toxic solvents from purified lutein and would have been motivated to do so. PIVEG therefore contends that claim 1 would have been obvious in light of the disclosure in the Poultry Science article.¹

The problem facing PIVEG on appeal is that the jury concluded that PIVEG failed to meet its burden of proving by clear and convincing evidence that claim 1 would have been obvious. PIVEG's appeal is predicated entirely on the asserted insufficiency of the evidence to support the jury's verdict. We agree with the district court that substantial evidence supported the verdict, and we therefore affirm the judgment with respect to the claim of obviousness.²

The method of obtaining purified lutein disclosed in the Poultry Science article uses toluene as a solvent. The resulting "purified" lutein product contains some residual toluene. Both PIVEG and Kemin presented expert testimony on whether one of skill in the art could remove the toluene from the purified lutein. Kemin's expert explained the difficulties with removing toluene from purified lutein crystals and testified that, although various separation methods would remove some of the toluene, those methods would not remove all traces of the toluene, as required by claim 1. In light of that testimony, it was reasonable for the jury to conclude that the claimed invention would not have been rendered obvious by what the Poultry Science article would have taught to a person of ordinary skill in the art at the time.

Kemin also presented evidence that the lutein obtained by the method disclosed in the Poultry Science article would not have satisfied two other requirements of claim 1 of the '714 patent as construed: that the lutein be "greater than about 90% pure" and that it contain "significantly less than 10% of other carotenoids." Although PIVEG's experts disputed some aspects of Kemin's evidence, PIVEG has failed to show that no reasonable juror could have accepted Kemin's version of the disputed facts.

B. Enforceability of the '714 Patent

PIVEG next argues that the '714 patent should be held unenforceable for inequitable conduct. PIVEG's theory of inequitable conduct focuses on Dr. Christopher Nelson, who was the president of Kemin Foods during prosecution of the '714 patent. Although Dr. Nelson was not a named inventor on the '714 patent, he had previously been involved with Kemin's research on purified lutein. PIVEG's theory is that Dr. Nelson knew the Poultry Science article was material, that he was sufficiently involved in prosecution of the '714 patent to have a duty to disclose the reference, and that he withheld the article from the PTO with deceptive intent. In response to special interrogatories posed by the district court judge, the jury, acting in an advisory capacity, found that the Poultry Science article was material to the patentability of the '714 patent and that Dr. Nelson withheld the article with intent to deceive the PTO. Although the court did not reject the jury's findings, it "ultimately conclude[d] the levels of materiality and intent are not so high as to warrant a finding of culpable intent such that the '714 patent should be held unenforceable." PIVEG argues that the court erred by finding the levels of materiality and intent low, and that the court abused its discretion by refusing to hold the '714 patent unenforceable.

With respect to materiality, the court concluded that the Poultry Science article was not highly material. The court first held that the Poultry Science article did not render the patent invalid. It further noted that the evidence of record suggested that the method disclosed in the Poultry Science article may not work as intended. Relying on Beckman Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547, 1551 (Fed.Cir.1989), PIVEG argues that materiality is not "negated" simply because the method disclosed in the Poultry Science article required some modification in order to be operative. While that general principle is true, the district court did not hold that the Poultry Science article was immaterial because it was not enabled. The court agreed with PIVEG that the article was material; it simply disagreed that the article was "highly" material, because "the ability to duplicate the information disclosed is relevant to the level of materiality attached to that information," and because there was "little persuasive record evidence the method disclosed [in the Poultry Science article] actually produces the...